INTRODUCTION o This presentation's goal is to give a thorough grasp of the many financing choices accessible to businesses and how they affect them. Exploring the ideas of both internal and external sources of finance will be our initial emphasis. Internal sources of finance entail producing money within the organisation, whilst external sources of financing refer to getting money from other parties or the larger financial market. We will look at the benefits and drawbacks of sources that are internal and external, as well as give examples to show how each is appropriate in certain scenarios. We'll then stress how crucial it is to keep a variety of financial sources on hand. An organisation may face dangers and constraints if it depends entirely on one source of funding. Therefore, we will talk about how expanding funding sources may help organisations become more resilient, adaptable, and stable financially.
INTERNAL SOURCES OF FINANCE o Internal sources of finance are those that are created and used within a single organisation. Retained profits, depreciation money, and working capital management techniques are some of these sources (Woods, 2019). Profits that stay inside the business rather than being paid out as dividends to shareholders are known as retained earnings. In order to replace or improve depreciating assets, an organisation may set aside a percentage of its income as depreciation funds. Internal funds can also be generated via effective working capital management practises, such as optimising inventory levels and controlling accounts receivable and payable (Horne et al., 2020).
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